Rising inequality is real

Readers of Robert Jackson’s reply to my letter “Great Gatsby Curve shows Horatio Alger becoming a myth” might mistakenly think I and progressives in general are socialists and (who knows?) communists. In my letter I noted that “Russia, under communism had a true system of economic socialism, which failed.”

I took Russian history and studied the totalitarian Soviet communist state in depth in political science. I’ve argued against pure socialism (state owns factories, farm, etc.) and communism with real communists.

We visited Russian fishing vessels that docked in Astoria, Ore. We saw how much the crew despised the communist political officers who were assigned to the ships. They got paid more than the crew and the only work they did was put up Lenin posters and take down names.

I visited the Soviet Far East just after the fall of communism in 1992 (Vladivostok, Khabarovsk, Nahodka) and saw first hand how badly true socialism served the people. I met people whose family members had been imprisoned or shot by the secret police.

Mr. Jackson tried to explain away rising economic inequality in America as a result of shake ups that started with the recession. In fact, corporations and the upper 1 percent have been amassing a larger and larger share of the nation’s wealth for decades before that.

An insufficiently regulated capitalist system or one where corporations and the ultra wealthy have so much power they can fashion the system almost completely according to their wants and desires is a system that is corrosive of democracy. Many in the middle class are waking up to the fact that they, or at least their children, will not maintain their present status.

I applaud Mr. Jackson for employing so many people in the past. However, he stated in his letter that “socialist/communist liberals” (and Democrats in general) are pushing America into socialism and communism. This is an untrue, incendiary and reckless statement.

Apparently in his world huge tax breaks and public policies benefiting corporations and the ultra wealthy are good policies, and money and policies that help the middle class and poor are, ipso facto, socialism and communism.

My central point is that rising economic inequality is indisputably real and is a serious danger to democracy itself.

Comments

Regarding the exchanges between Norm Osterman and Robert Jackson, I don't Mr. Jackson chooses his words badly because he doesn't own a dictionary. I think it's clear that insulting people he disagrees with makes him feel good.

Mr. Jackson, two things for you to consider.

Anyone following your advice to study history will quickly learn that words like "socialist" and "communist" have used against pretty much every liberal or progressive reform enacted in the last 100 years. This includes things like Medicare, social security, unemployment insurance, and federal deposit insurance.

I'm reading a book about Teddy Roosevelt and learned that when he first proposed that corporations be required to report their profit and loss statements to the government, he was told that forcing companies to report earnings honestly was a "Bolshevik" infringement on the rights of business owners.

Also, many of the reforms first labeled "socialist" in the past have turned out to be pretty popular. If you repeatedly tell people, young people in particular, that "socialism" includes making insurance companies carry students on their parents health plans until they're 26, as well as things like the minimum wage or basic environmental protections . . . you shouldn't be surprised to learn that people 18-29 years old have a more favorable opinion of “socialism” than "capitalism."

You’re perfectly free to continue slandering anything you disagree with as “communism-socialism-liberalism." But please understand you’re not likely to persuade anyone who doesn’t already agree with you.

Though I rarely agree with you, I always enjoy your thoughtful, well written letters. Sunday’s letter is no exception. To toss it back, virtually all of the data cited by Obama and the left to support the income equality argument excludes taxes and transfer payments, e.g., Medicaid, Medicare, Food Stamps, Public Housing, the Earned Income Credit, Unemployment Insurance and costly employee benefits such as health insurance.

Likewise I disagree with your comments and observations on socialism. You seem to distinguish between “bad” socialism, where the government owns the means of production, and “good” socialism, which is characterized by radical redistribution of the wealth. Both eventually lead to the same thing, namely, economic stagnation and the further impoverishment of the most vulnerable.

Yes, we need to take care of our aged, blind, crippled and crazy, but I just cannot buy into any of your arguments about “the rich.” I think that everyone should have the right to get wealthy in our country and I’ve never envied anyone that has. More power to ‘em! They employ lots of people who need jobs to eat and support their families!

If we really want to help the poor we should focus more on creating jobs. And by that I mean “real jobs,” not more government jobs. I have nothing against government workers, but anyone that believes that more government jobs will solve our unemployment problem is sorely mistaken. Government jobs are not self-sustaining.

The best way to create jobs is, in Reagan’s words, by getting government off the backs of the people. This can only be done by creating a favorable climate for businesses to grow and expand, which can only be done through tax reform and deregulation. As JFK said, “A rising tide lifts all boats.”

pdywgn--- Did you even read the letter? It stated that communism and socialism in which the state owns and operates the means of production and distribution of goods are systems not to be wished for. SUMMARY: Progressives are not getting on this same dead horse! Calling progressives socialists is wrong, calling them communists is just silly.,

Too many conservatives use the word "socialism" to describe anything they don't like in economics and politics. They do this because Rush and Fox News encourage it. Anything that helps the middle class or poor is socialist. If their dog pees on the carpet I wouldn't be surprised if they called Fido a socialist.

Giving the uber wealthy enormous tax breaks or writing weaker environmental laws for corporations in the thought process of the right are good laws. In truth, the bigger share of the pie they bogart, the more power they have to increase their piece of the economic pie even more.

Having the Supreme Court on your side doesn't hurt either when it declares money is speech, corporations are people and the wealthy can give unlimited amounts in political donations,.

If you don't believe that the upper percentiles are increasing their share of the pie, look at graphs provided by the CBO (Congressional Budget Office): http://www.cbo.gov/publication/42729 Their share of wealth has continued to increase since 2007. You can look it up.

Igor--I can't open the online WSJ article. I disagree with the idea that adding in transfer payment, etc to the lower half evens everything out. Of course everyone agrees that an economy that is growing faster would be a good thing. More jobs are needed. It is sort of trading in the obvious However, the TPP (I'm 100% against this Obama treaty, especially fast tracking) appears to be a job and consumer interests killer. I'm still going to collect petition signatures calling for a constitutional amendment to overturn Citizens United, march for a higher minimum wage, and other progressive bu not socialist stuff. This is America!

Igor-this is my last comment. It is in response to these comments you made:
"Likewise I disagree with your comments and observations on socialism. You seem to distinguish between “bad” socialism, where the government owns the means of production, and “good” socialism, which is characterized by radical redistribution of the wealth. Both eventually lead to the same thing, namely, economic stagnation and the further impoverishment of the most vulnerable."

We have a progressive tax system. Asking for wealthy individuals and individuals to pay their fair share is not socialism. (If asking the top to pay more is really socialism then is asking for lower rates for the top fascism?--Of course not.) The redistribution of wealth is going increasingly to the top. A number of corporations, GE, Boeing and many more pay no taxes or very minimal taxes (eg, Exxon 1%) after posting healthy profits. Between 1978 and 2011 workers pay went up 5.7%; the S&P 500 went up 349%; CEO pay went up 726.7%. Remember Romney's 13.9% tax rate. Getting huge corporations and the ultra wealthy to pay somewhat more in taxes isn't going to "kill the goose that laid the golden egg," even though they whine that it will. If someone suggested a 90% tax rate for the ultra wealthy I'd oppose it. That isn't going to happen. I do, however, think that if someone could only afford a 100 ft. yacht instead of a 120 ft. yacht, their life would go on.

You’re right. When I clicked it took me to the first few lines of the article but you couldn’t read the rest without an online subscription. I originally read the article in the paper edition. I was able to pull it off the net by Googling “Grady, Obsession, Inequality and WSJ.” If you want to read the whole thing you can access it through Google.

Common sense and everything I’ve read about the minimum wage suggests that raising it beyond what the market will support will be a job killer and likely hurt the poor the most. Minimum wage jobs were never intended to pay enough to raise a family. The profit margin in the fast food industry is extremely small. Raising the minimum wage for fast food workers will result in the loss of jobs and the increase in the cost of a Big Mac. Like you, I’m opposed.

I did not mean to suggest that there is anything wrong with a progressive tax system or that the wealthy should not pay more. My comments were aimed at the proposals of some on the left that are advocating radical redistribution, i.e., confiscatory taxation on the earnings of higher earners. The effects of 90 plus marginal rates during WWII were debilitating.

Every time taxes have been lowered (Coolidge, Kennedy, Reagan and Bush) the economy took off like a rocket. Like Laffer, I believe that revenues are maximized when we rates are at an optimal level. Too high or too low revenues will drop and the economy generally suffers too. I agree with you that everyone should pay his “fair share” but I’m not sure that we define “fair share” the same way. In my mind, taxpayers in the same category should pay the same so, like you, I’m appalled that some big corporations with high earnings pay little or no taxes. Reform is needed to prohibit this.

Likewise I’m disgusted when wealthy individuals are able to avoid paying their “fair share” through loopholes and tax accounting tricks. Again, reform is the answer. However, I don’t agree that confiscatory rates for the wealthy are appropriate. The top 10% routinely pays 70% of all income taxes. The bottom 50% pays barely 2%. What’s fair? I don’t pretend to know the answer but I do know, as a small businessman, that hamstringing people that work hard to get ahead and expand their business is bad economic policy.

I appreciate your thoughtful comments and agree with everything you say but for one thing, i.e., your remark that wealth is being “redistributed” to the top. While it’s true that those at the top are earning more than ever before (CEO pay at an obscene level), I don’t review this as “redistribution.” If the top CEOs were not worth what they’re earning then the boards and shareholders would not be paying them their obscene salaries. I don’t pretend to know the answer but limiting what people like this can be paid truly would smack of socialism.